The Farm Storage and Facility Loan Program Expands

Happy Ag Day! In honor of Ag DayThe Farm Bill just keeps bringing changes and more options to the table for farmers and ranchers. One of those changes, which brings more options, is through the Farm Storage and Facility Loan Program.

No changes have been made to the Program as described above. The Program continues to provide low-interest loans for building or upgrading eligible facilities for eligible commodities.

The changes that have been made expand the Program. The expansion is for fruit and vegetable producers. For the first time, the Program will cover the structure and equipment required to get fruits and vegetables washed, treated and packed. Thus, for fruit and vegetable producers, the following are eligible for Program loans:

Boxing

Baggers

Brush Polishers

Bulk Bin Tippers

Case Palletizers

Cold Dip Tanks

Fruit/Vegetable Conveyors

Food Safety-Related Equipment

Drying Tunnels

Dumpers

Fruit/Vegetable Hoppers

Hydrolifts

Hydrocoolers

Ice Machine

Quality Graders

Roller Creepfeeders

Roller Spray Units

Sealants

Sizers

Sorting Bins/Tables

Washers

Waxers

Weight Graders

Note that all drying and handling equipment must be permanently affixed. In other words, drying and handling equipment cannot be mobile or easily moveable.

Do I need collateral or security for the loan?

Changes have also been made to the security requirement for a Program loan. Program loans up to $100,000 now can be secured via a promissory note only and do not require collateral. For loans over $100,000, collateral is required.

What is the maximum loan amount, loan term etc.?

The maximum is $500,000 per loan. The loan can only be 85% of the cost of the eligible facility. The loan term can be 7, 10, or 12 years dependent upon the amount of the loan. Also note that the loan will not be distributed until the facility has been built and inspected, with an exception for one qualify partial disbursement.

What about insurance; do I need that?

If you are a fruit and vegetable producer, you may annually request a waiver of the multi-peril crop insurance or the Non-Insured Crop Assistance Program requirement.

The Farm Service Agency recently updated their Fact Sheet about the Program. Keep in mind that the Program still provides loans for grain bins, hay barns and the like — the Program has merely expanded to include other items that are of particular interest to fruit and vegetable producers.

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This website and blog is for educational and informational purposes only. Please contact legal counsel in your state (or contact us to determine if you qualify for Legal Aid of Nebraska's services) to discuss your specific questions.

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Legal Aid of Nebraska's Farm and Ranch Project is the oldest continuously operating farm legal services program in the United States. Due to a grant from the USDA's National Institute of Food and Agriculture Beginning Farmer and Rancher Development Program, Legal Aid of Nebraska has the opportunity to further its range of services to Nebraska and South Dakota farmers and ranchers.